But they are still struggling to agree what tax regime should apply after June 1999.

National experts were presented with two alternatives for filling the tax vacuum created by the abolition of duty free at the second meeting of the excise duty committee last month, but failed to come down clearly in favour of either option.

Under the first, all goods sold on ships and aircraft during EU journeys would be taxed according to the excise duty rates applying at the initial port of departure. This would mean a single excise duty for the outward and return segments of, say, a ferry trip between Dover and Calais.There are fears, however, that this would encourage ferry companies to shift their departures to the country with the lowest tax in order to boost sales to travellers facing higher prices at home.

Under a second, more complicated option, duty would be charged at the rate of the country which the ship or aircraft had just left. This would lead to at least two rates on a conventional journey, or even more on complex routes taking in more than two ports.

Most EU countries favour the simplified one-rate option, but with some undecided and others demanding extra time to make up their minds, the issue has been left open until the next meeting of tax experts scheduled for October.

Amid the growing clamour from duty free companies for clarity so that they can prepare for the change-over, the Commission has offered to hold an earlier meeting in September. It will be up to national governments to decide on the timing.

National experts have, however, made it clear that duty-free sales will be banned on all journeys between EU ports or airports, even if the route takes passengers through international waters or airspace. They insist that all ferry companies and airlines will be bound by this ruling, no matter what flag they are flying or where they are registered.The warning comes after speculation that some airlines and ferry companies would try to exploit loopholes in the law by selling duty-free goods while their aircraft and ships were outside Union jurisdiction.

Experts say the only option left open to transport companies anxious to sidestep abolition now is to launch a court challenge to the Commission’s interpretation of international tax law.

Swedish ferry giant Stena Line has already said it is weighing up a legal challenge to the Commission’s view that duty-free sales in international waters between EU ports will be illegal.The Brussels-based European charter airlines group, the International Air Carriers Association (IACA), says the Commission’s right to impose its tax rules on international airspace is also open to question.